In the speculative world of penny stocks, there are always multiple overlooked opportunities to consider. Investing in penny stocks is not without risk, and as I always caution, it should be done responsibly.
Nevertheless, there are multiple reasons to believe in the companies discussed below. Broad macroeconomic tailwinds are approaching in the second half of 2024. Signs have emerged that the Fed will cut rates toward the end of the summer. Lower interest rates will provide a massive boost across the stock market, including penny shares.
That does not imply that all penny stocks are strong investments. However, the firms we will discuss have more positives than negatives overall. There are strong cases to be made for each. Let’s begin.
Overlooked Penny Stocks: Altimmune (ALT)
Altimmune (NASDAQ:ALT) has emerged as one of several promising weight loss drug stocks.
Whether or not it is overlooked is debatable, but it is primed to pop either way.
The reason to be optimistic about alt immune stems from weight loss being associated with a decrease in fat mass and muscle mass. Patients desire to lose the maximum amount of fat while retaining the maximum amount of muscle. The problem is that approved GLP-1 agonist weight loss drugs from Eli Lilly (NYSE:LLY) and Novo Nordisk (NYSE:NVO) are associated with significantly higher rates of muscle wasting.
Patients who took Altimmune’s pemvidutide experienced a 25.5% decrease in lean muscle mass. Ozempic and Wegovy are associated with a nearly 40% decline in lean muscle mass associated with weight loss.
Maintaining muscle mass during weight loss is not simply a matter of aesthetics. Muscle mass is associated with all kinds of positive health markers and is especially important in elderly populations. Pharma companies that can commercialize muscle-preserving weight loss drugs are a subsector to pay particular attention to, and Altimmune is one of them.
Grab Holdings (GRAB)
Grab Holdings (NASDAQ:GRAB) stock represents a burgeoning super app on the cost of profitability shortly. It’s also a company that just reported better-than-expected earnings, making it a company investors should not overlook.
Revenue growth was strong at 24%, leading to sales of $653 million. The company also managed to narrow its operating loss by $129 million. The strong performance instilled confidence in the firm to raise its 2024 EBITDA prediction from $180 to $200 million to between $250 and $270 million.
The super app company serves a primarily Southeast Asian audience, offering ride-hailing, food delivery services, and mobile fintech options. The company was particularly optimistic about that last category, noting that its strategic fintech execution is paying off. The company notes that it is achieving a lower cost of payments than it would otherwise under third-party vendors. Success in that realm is just one more reason to believe in the rapidly-growing upstart company.
Lithium Americas (LAC)
One primary reason Lithium Americas (NYSE:LAC) stock continues to be overlooked is that it requires patience.
The company continues developing the Thacker Pass lithium deposit in Nevada. Once it is opened, it will be the largest lithium project in history. However, it will take time to materialize. The company aims to achieve full production by 2028.
Thacker Pass is estimated to contain more than 40 years of mine life and is one of the largest such deposits globally.
Its size and strategic location in North America have not gone unnoticed. General Motors (NYSE:GM) has invested $650 million in the project. Additionally, the Department of Energy Has given Lithium Americas a $2.26 billion loan to help finance the construction of Lithium Americas’ Thacker Pass operations.
Assuming that share prices could quadruple or quintuple from their current levels in the next 12 to 18 months is reasonable.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
